Stimulus and lay-offs

Here is a great link to a NEA article on how districts continue to lay-off individuals without looking into how stimulus money can be used.

http://blogs.nea.org/ednotes/2009/04/money-is-coming-so-why-am-i-getting.html

Everyday, we get more information behind the stimulus money that is being released for education. Contact the office to get the latest information to share with your members, the district, and your community.

Retirement Stimulus stalls

In case you didn't catch the news this morning, the MEA proposed retirement stimulus stalled. According to our press release, President Salters expressed thanks to the bipartisan work of a group of legislators. However, there is disappointment with some legislators and school business officials that could not see the broader benefits for Michigan’s future that this legislation would have brought.

Hopefully, this discussion will continue and lead to alternatives that create opportunities that will avoid cuts for schools.

Threats of Lay-off negatively impacts work performance

With the current economic conditions in Michigan, many of our members have expressed concerns about potential reduction of hours and lay-offs. I came across this most recent article entitled "Employees Spending More Time Worrying About Job Security" by Theresa Minton-Eversole in the latest online SHRM newsletter. Ms. Minton-Eversole points to research that shows that individuals are less productive when they are worried about their job security. In 2 nationwide surveys conducted in January 2009, employees reported that they spend up to 3 hours a day worrying about their job. The most common reason why employees worry about job security? A lack of communication by supervisors. Does this sound familar?



Why the suddent lack of communication from supervisors? The article states that many supervisors want to limit their contact with the individuals that may be laid off. In other words, it is an avoidance technique. The article continues on that supervisors avoid employees during this time because they feel bad about these lay-offs even though budget cuts are often out of their control. I am sure that in education, this guilt may be compounded by the fact that school boards are diverting federal stimulus money into their fund surplus rather than using them to prevent lay-offs.

What can you do to keep the lines of communication open? First, continue to talk to your principal/supervisor. Maintaining open lines of communication with administrators allows for information to be shared back and forth. It is one way in which both the Association member and principal can work together to make sure the stimulus money is used to protect jobs and maintain levels of education rather than continuing to fund a school board surplus.

Secondly, attend your school board meetings. Talk to your board members about how your district is going to use the stimulus money that they receive. Ask for documentation and proof when the superintendent or board member says that the money can't be used to preserve jobs, wages, and benefits. I am willing to bet they will not have evidence to justify their position. Contact your local leader and the UniServ office for talking points to help you in these conversations.

Finally, talk to your fellow members. This is a time in which rumors grow and spread at a lightening pace. When you here a rumor about lay-offs or job cuts, ask for evidence that would make it true. These rumors have a way of creating tension between our fellow members. If there seems to be some truth to the rumor, contact your local president and leaders so that they can talk to the administration to see if it is true or not.

Federal stimulus

A recent article from the New York Times regarding the stimulus and education can be found at http://www.nytimes.com/2009/03/09/education/09educ.html?_r=1

There are lots of questions regarding the stimulus and how it will impact your district. Feel free to contact the office with any questions that you have.

Incentive, Incentive, Incentive...Lobby Day 2009

As one might expect, Lobby Day this year was dominated by one theme: Retirement Stimulus for education employees. It was noted by Ed Sarpolous, GA Director, that the only piece of positive news that has come out of Lansing in the past 60 days has come from the MEA. In some respects that is true. All that the Governor has talked about has been cuts, cuts and more cuts.

Since we came out with our proposal, the Governor has also proposed a school retirement incentive. However, there are some key differences:
1.) The MEA plan is a change from 1.5 to 2.0 in the multiplier used to calculate your pension. Governor Granholm's plan would be a one time only bonus. This bonus could be as much as half of the teacher's salary.
2.) The MEA plan includes ALL school employees; Governor Granholm's plan is only intended for teachers, excluding ESP and administrators.
3.) The MEA plan is intended to keep the savings generated by the incentive at the local level; Governor Granholm's plan would require local school districts to share in the cost of the incentive by matching a portion of the State bonus.

In other Lobby Day events, 9GH had over 20 members and even a couple of area administrators attend lobbying activities. Groups were able to meet with the Representatives Calley and Huckleberry. We also visited their offices and met with their respective chief of staff. In the case of Rep. Calley, this was our second year visiting his office. 9 members were able to meet with Representative Calley at his office as well as during lunch. (We also meet with him the night before at the Leg Council held at the Corner Landing...lots of face time with Rep. Calley over the past 24 hours!) During these meetings, he stated that he is in support of the MEA version of the retirement stimulus.

All in all, Lobby Day was a success. For more info on Lobby Day, visit www.mea.org

FAQs on the retirement stimulus

I found some of these FAQs on the MEA webpage. These are just a sample of some of the questions and answers that can be found by visiting www.mea.org

Who would be eligible for the proposed Retirement Stimulus Initiative?
Anyone who is actively employed by a Michigan public school or community college and has met the age and service requirements to be eligible for a regular or early reduced pension can take advantage of the plan.

How many years must I have been employed, vested, etc.?
You need at least 10 years of service to become vested if you are a MIP member. It is possible to become vested with five years of service if you are age 60.

Is this plan only available to teachers? What about assistants, support staff, administration, community college, etc?

It would be available to ALL K-12, community college and higher education public school employees in ALL employment classifications.

How do I calculate my pension based on my current earnings?

You can go to www.michigan.gov/orsschools and find a calculator to assist you in calculating your pension. You have to determine your final average salary for the three highest consecutive years of earning if you have MIP or five consecutive years under the Basic program. You multiply that figure by .015, and then multiply that figure by your total years of service credit.

Is there a cap on the allowed pension benefit?

There is no cap.

Why is this program being proposed?

The goal is to save school districts $411 million dollars in the first year and $1.7billion over 10 years.

How long will I have to take advantage of this offer?

Once the bill in introduced, the specific timelines will be known. Our concept proposal would permit you to apply between March 1, 2009 and March 31, 2010.

When will this offer take effect?

If the proposal becomes law, you could claim the 2.0 multiplier as early as June 2009

What is the advantage of taking this offer?

You would receive a 33.33% increase in your pension for the rest of your life.

Will this proposal affect my health benefits?

This proposal will have no impact on your eligibility for health insurance benefits.


How is this proposal different from a regular retirement? Will this apply to those who have already retired?

This proposal is not retroactive and will only apply to those employees who are currently employed and eligible to retire. This stimulus would provide a significant increase in lifetime pension.

If I already planned to retire, will I miss this offer?
Assuming a stimulus bill is passed into law, you won’t miss this offer. However, you may want to delay filing for your retirement until you see what the Legislature does with this stimulus

Are there penalties if I do NOT accept this offer?

There is no penalty. You continue to work, and earn your regular salary and added service credit.

Is this plan feasible? Won’t it cost the MEA more money?

It will not cost the MEA more money. Participating employers may see a modest increase in their retirement contribution rate in order to pay for the stimulus. However, local districts will realize tremendous savings from the stimulus so they should be able to handle the increased costs that they will incur.

Will this plan fail and go broke in 10 or more years?
No, that is not likely. This plan cannot “go broke.” There are funding requirements that must be met, and there are constitutional guarantees that require the pension plan be funded properly.

Is there a percentage age penalty for those who retire early?

If you elect an early, reduced pension, your pension is subject to one-half of 1 percent reduction for each month that you take your pension prior to your 60th birthday. This presumes that you are age 55 with 15 or more years of service.

Are early retirees eligible?

Yes, if you meet the requirements listed above.

Can we buy years and will bought years count?

Purchased years of service credit will count for the purpose of determining your annual pension.


What is the definition of “retirement eligibility” under this proposal?

To be eligible for a monthly retirement pension, you must meet minimum age and service requirements.

These requirements vary depending on whether you are a Basic Plan or Member Investment Plan (MIP) member. In general, Basic Plan members are those who were in the Public School Employees Retirement System before the Member Investment Plan was introduced in 1987, and, when offered a choice, elected to remain in the plan when offered a choice.

Full Retirement Provisions for each plan are described below:

MIP members
As a MIP member, you will qualify for full retirement under any of the following provisions:

MIP 46 with 30. You qualify for full retirement at any age with at least 30 years of service. However, if you have purchased universal buy-in service credit, you must be at least 46 years of age. At least 15 years of service credit must have been earned through the Michigan Public School Employees Retirement System.
MIP 60 with 10. You are eligible for your pension at age 60 with at least 10 years of service credit.
MIP 60 with 5. If you are age 60 and you have at least 5 years of service credit, you qualify for a pension if at least 0.1 years of service credit have been earned in each of the five school fiscal years immediately before your retirement effective date and you terminated your public school service immediately before your retirement effective date. A school fiscal year runs from July 1 through June 30.
Basic Plan members
As a Basic Plan member, you qualify for a full retirement under the following retirement provisions:

Basic 55 with 30. You will qualify for your pension when you are at least 55 years of age and have 30 or more years of service credit. At least 15 years of service credit must have been earned through the Michigan Public School Employees Retirement System (MPSERS).
Basic 60 with 10. You qualify for a pension at age 60 with at least 10 years of service credit.
Early Reduced Retirement Provisions
Whether you are Basic or MIP, you can take an early, reduced retirement as early as age 55 if you have at least 15 but fewer than 30 years of service. Your pension amount is permanently reduced by one-half of 1 percent for each month you take your pension before age 60.

You must be an active member to be eligible for the early reduced benefit. An active member is someone who is still working and contributing to the plan. If you terminate employment before the month you reach pension eligibility age, you become a deferred member. Deferred members don't qualify for the early reduced pension.

To retire under the early, reduced provision, you must meet all of the following conditions:

You worked in the month of your 55th birthday. An exception may apply if you were born in a summer month.
You have at least 15 but fewer than 30 years of service credit with at least 10 years of service credit earned under this system.
You earned at least 0.1 year of service credit in each of the 5 school fiscal years immediately before your retirement effective date. The fiscal year in which you are retiring counts in the 5 school fiscal years.
You terminated Michigan public school service immediately before your retirement effective date.

Is there an age requirement or age limit?

No, there is no maximum limit but there are eligibility requirements. See the answer to the above question.

Would I have to wait until age 55 to start collecting my pension?

See the answer to the questions above regarding eligibility. Basic Plan members would have to be 55 years of age or older to take advantage of this stimulus.

Is there a 2.0 multiplier? If so, who qualifies and how?

A bill has to be adopted and signed into law before any increase in the multiplier becomes effective. The current multiplier is 1.5 percent. See the above answers concerning who qualifies and how.

Will this plan be offered to Basic members?

Yes, all Basic and MIP plan participants could take advantage of the offer if they are qualified to retire.

What is the maximum number of people that will be able to participate? Is there a limit?

The legislation will dictate what, if any, limits may be imposed. The MEA proposal initially did not include limits. We estimate that there are approximately 55,000 members who may be eligible.

Can any of my years of service in the Catholic school system count toward my retirement?
Your service in the Catholic school system is considered non-public and can only count if you purchase your non-public service in the form of service credit. You can only purchase five years of service credit. Also, your non-public service does not count toward the 10-year vesting requirement. Go to www.michigan.gov/orsschools for more information.

What is the governor’s proposal and will it work?

The governor is proposing a one-time severance bonus. The state dollars allocated for it would have to be matched by cash-strapped local school districts.

Given this economy, it’s not likely that the governor’s severance idea will generate enough retirements, unlike MEA’s proposal. Also, the governor’s plan will force school districts to come up with financing at a time when they don’t have the resources available to them.